- FEED contracts awarded considering in-country value in commercial evaluation process
- Advanced technologies and integrated project delivery approach will help to unlock maximum value
- Project could meet 20 percent of the UAE’s gas demand, sustainably and economically
The Abu Dhabi National Oil Company (ADNOC) awarded the two Front End Engineering Design (FEED) contracts for ADNOC’s planned offshore ultra-sour gas mega project, which consists of the Hail, Ghasha and Dalma fields. Bechtel (UK) was awarded Hail & Ghasha FEED Contract and TechnipFMC (UAE) was awarded Dalma FEED Contract.
In man-hours, the two FEED contracts, collectively, are the largest awarded by an oil and gas company, underpinning the criticality of a detailed FEED phase to optimize project cost and schedule. The project, in the northwest offshore area of the Emirate of Abu Dhabi, could meet 20 percent of the UAE’s gas demand by the second half of the next decade.
H.E. Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, said: “The growth in energy demand in Abu Dhabi, and the wider UAE, has prompted ADNOC to further harness its gas resources, as part of its 2030 smart growth strategy. This FEED award provides ADNOC with the potential to unlock additional undeveloped sour gas reserves and will allow us to deliver against our strategic objective to ensure a sustainable and economic supply of gas.”
In addition to awarding the FEED contracts, ADNOC is near to awarding five technology licensor contracts, covering a gas treatment licensor; a sulphur recovery unit (SRU) licensor; a natural gas liquids (NGL) licensor; a condensates recovery (hydro treaters) licensor and a hydrogen generation licensor. These technologies are critical to the successful execution of the FEED phase.
Abdulmunim Saif Al Kindy, Director of ADNOC’s Upstream business, said: “The decision to award both FEED contracts came after a rigorous and extremely competitive tendering process, ensuring we will strictly manage costs by working with contractors that can deploy effective engineering and robust value-add technologies. In progressing with these projects, we create the potential to capitalize on our success and experience in ultra-sour gas production, gained from the development of the Shah field, the largest project of its kind in the world.”
From the start of the FEED phase, ADNOC will implement, for the first time, an integrated project delivery (IPD) approach. This will enable it to reduce the project’s development schedule and cost by integrating and involving all relevant stakeholders. Relevant stakeholders are potential EPC bidders, major manufacturers and governmental bodies, who are critical to improve design quality, identify uncertainties and enhance the precision of required engineering jobs.
As part of ADNOC’s selection criteria for the FEED commercial evaluation process, the company carefully considered the extent to which bidders would help to drive in-country value (ICV) for the UAE. By integrating ICV criteria into ADNOC’s overall commercial evaluation process, the company is delivering on its new in-country value strategy, aimed at nurturing new local and international partnerships and opportunities, catalysing socio-economic growth, improving knowledge transfer, and creating job opportunities for UAE nationals.
The Hail, Gasha and Dalma project taps into Abu Dhabi’s Arab formation, which is estimated to hold multiple trillions of cubic feet of recoverable gas and from which the project is expected to produce more than one billion cubic feet of gas per day (cfd), enough gas to provide electricity to two million homes.
The awarding of FEED contracts follows the awarding of the Project Management Consultancy and artificial islands Design and Survey Contracts to Artelia and KBR, formerly Kellogg Brown and Root.